If you do not already have updated credit and debit cards, keep an eye on your mailbox for the latest in credit card technology. EMV chip cards have been popular in Europe for a long time. In fact, EMV is an acronym that stands for Europay, Mastercard and Visa. The United States is one of the last countries changing over to the EMV tech, and we are finding out what a lot of countries that have instituted the change already know: that there are several big changes.
The basic concept behind these cards is that they make it harder for criminals to utilize stolen information from magnetic strips. However, there is going to be a learning curve for American consumers that will change the way you do everything from buying groceries to giving restaurant servers a tip.
According to the Mercator Advisory Group, the U.K. has experienced a dramatic decline in counterfeit credit card activity since the adoption of EMV technology. FICO reported that in 2001, approximately 39 percent of all credit card fraud in the U.K. was caused by counterfeiting, but this number dropped to 10 percent by 2012.
This makes credit card skimmers and cloned cards a lot less profitable for thieves. Unfortunately, EMV chip cards cannot offer extra protection online, so it is still critical to protect your card number.
Now that you have a basic understanding of what EMV chip cards actually are, it is time to prepare yourself for how these cards may change your next night out.
1. The Shopping Experience
The Lacrosse Tribune reported that EMV cards became standard in the U.S. on October 1, but do not fret if your card still does not have one of these chips. Most retailers will maintain dual point-of-sale technology for at least the next two to three years. You will need to become acclimated to the way that EMV cards work, though, especially if you already have a chip card.
To put it simply, instead of swiping your debit or credit card, you will be required to insert the chip side of your card into a credit card reader. You will then be prompted to sign for your transaction, and you might be required to enter a PIN. The unique code that your chip generates to make this payment is only good once, which helps keep your card information safe.
2. The Dining Experience
The basic shopping experience as described above will not represent a major change for consumers, although it will definitely take some getting used to. Another real difference between paying with an old-fashioned magnetic strip and your new EMV card will become more apparent when you go out to eat. Instead of adding a tip after your bill has been cashed out, you will soon find yourself needing to take care of this aspect of a night out before your credit card’s chip is scanned.
Interestingly, VISA is planning to limit tips to 20 percent of the total purchase price. This means that if you want to reward good service with a better tip, you will need to carry cash on you whenever you go out to eat. This is certain to alter the way that tipping occurs in the U.S., and the unintended ripple effect of this change is likely to be an increased push toward higher hourly wages for servers.
3. A Night at the Movies
Going to the movies after dinner is a popular way to enjoy a night out, and this tradition is likely to encounter a few changes in near future because of the new EMV tech. The reality is that chip card technology is much more expensive than the traditional credit card point-of-sale machines, but businesses will be held increasingly liable for any fraudulent activity or data breaches that are caused by not having EMV technology in place, reports BizJournals.
To avoid these issues without absorbing an exorbitant cost, places such as movie theaters can be expected to make many minor changes. Do not be surprised if your favorite movie theater soon begins selling tickets and concessions at the same counter.
This will reduce the total number of EMV machines that they need, which will make it easier for this type of business model to stay profitable. After all, movie theaters make the vast majority of their revenue from concessions, according to CNN Money, so it would not be a good financial decision to waste money on upgrading several point-of-sale machines that are only used for ticket sales.
4. A Rise in Cash Only Establishments
Believe it or not, the emergence of EMV technology may actually make more business owners go back in time to the days of the cash only sale. This is still surprisingly prevalent in some areas, including beach towns, but the cost involved with converting point-of-sale machines versus the risk of being found liable for fraud will almost certainly cause many other small businesses to stop taking credit cards altogether.
In other words, if you are planning to stop at a small local coffee shop after dinner, you should make sure that you have cash available. This will also be necessary on the offhand chance that you do not have a chip-card yet and encounter a business that has already completely converted to EMV technology without leaving their magnetic strip scanners in place to help people throughout the nationwide transition.
Everyone in the nation who relies on their credit and debit cards will soon have the necessary chips to use EMV point-of-sale machines. However, this heightened security will come with a few convenience trade-offs, including needing to keep cash on hand for a variety of situations.
CSO Online cautions consumers to also prepare themselves for inconsistent payment methods at their favorite stores. After all, even though EMV technology is now officially the U.S. standard, at least 50 percent of merchants have not made the switch yet.
